LAW 84752

A restrictive covenant stating that a house cannot be sold to someone who is not of the Caucasian race will be upheld by the courts.
a. True
b. False

Eminent domain is not one of the recognized inherent powers of government.
​a. True
b. False

Leonard is a traveling salesman for Bighorn, Inc. He calls on Ralphyl, one of his regular accounts, in order to solicit another order. While in the store, Leonard collects a past due account for Bighorn, but he doesn’t get another order. It has been a bad day in which Leonard hasn’t had any orders. He is so angry about this when he leaves the store that he drives negligently and hits a pedestrian with his car. In this case:
a. Bighorn has no liability for Leonard’s negligence, because Leonard is responsible for his own negligent conduct.
b. since he was driving at the time of the negligent conduct, Leonard was no longer within the scope of his employment.
c. Bighorn will be liable for Leonard’s negligence under the doctrine of respondeatsuperior.
d. Leonard is an independent contractor and, therefore, Bighorn will have no liability for his negligence.

A thief stole Martin’s car and installed a tape deck in it. Later the police caught the thief and returned the car to
Martin. Martin now owns the tape deck by accession.
​a. True
b. False

Which of the following would NOT be a merchant under Article 2 of the UCC?
a. The owner of a hardware store which sells paint
b. A car mechanic who fixes used cars and sells them in his spare time
c. A person who inherits three speedboats and wants to sell them to buy a car
​d. None of these are merchants.

A Chapter 13 plan of reorganization may include all but which one of the following?
a. Priority debts must be paid in full unless the debtor waives that right.
​b. The trustee must control future wages.
c. Assets must be liquidated.
d. The rights of secured and unsecured creditors may be modified.

Which of the following is not a purpose of the Consumer Product Safety Commission?
a. To create legislation imposing mandatory safety standards
b. To protect the public against unreasonable risks of injury associated with consumer products
​c. To assist consumers in evaluating the comparative safety of consumer products
d. To develop uniform safety standards for consumer products

If Arthur conveys his farm to Melissa in fee simple as long as she does not develop the property for non-farm use, in which case the property would revert to Arthur’s estate, he has created:
a. a fee simple absolute.
​b. a base fee.
c. a life estate with a remainder.
d. a future interest to Melissa.

Equitable remedies are available any time the plaintiff chooses them over money damages.
​a. True
b. False

The right of the seller to stop delivery of the goods ceases when:
a. a negotiable document of title covering the goods is negotiated to the buyer.
b. the buyer receives the goods.
c. Either of these events occurs.
​d. It never ceases.

Under the CISG, the aggrieved party in a breach of contract has no duty to mitigate the loss.
a. True
b. False

Bill bets his friend $100 that the Patriots will win the next Super Bowl. This is an:
a. unconscionable contract and therefore illegal.
b. illegal wagering agreement.
c. agreement to obstruct justice and therefore illegal.
​d. illegal restraint of trade.

Maureen agrees to sell her interest in the farm to Joe. Maureen and her husband, Bill, hold the property as tenants by the entireties. What consequence?
a. There is no sale.
b. The sale severs the tenancy and creates a tenancy in common.
​c. The sale transfers one-half interest in land.
d. The sale results in a partition of the land.

Only the intentional destruction of personal property and not the use of the property in an unauthorized manner can give rise to a cause of action for conversion.
a. True
b. False

The shelter rule applies even if the transferee was a party to fraud or illegality affecting the instrument.
​a. True
b. False

The shareholders normally determine the price for which shares will be issued unlessthe charter permits the board of directors to set the price.
a. True
b. False

The MBCA, RMBCA, and statutes of many states permit corporations to redeem both preferred and common stock.
a. True
b. False

If shares are issued with no par value, the entire price must be allocated to stated capital.
​a. True
b. False

Which of the following is correct regarding a two-for-one stock split?
a. The purpose of the split may be to increase the number of potential stockholders.
b. The purpose of the split is to make a distribution to the stockholders.
c. After the split, each stockholder will have greater ownership interest in the corporation.
​d. The value of each share of stock will increase as a result of the split.

Which of the following statements is true?
a. The International Court of Justice renders binding decisions and advisory opinions to the many nations that submit their disputes to it.
b. The International Court of Justice is the judiciary branch of the United Nations, and its judges are elected by a majority of both the U.N. General Assembly and the U.N. Security Council.
c. The International Court of Justice was formed as the judiciary branch of the EC.
d. The International Court of Justice is very useful, in part because nations as well as private individuals and corporations may be parties to an action before the court.

Which of the following is correct regarding the removal of Mr. X from the board of XYZ?
a. The common law does not permit removal of a director for any reason.
​b. The RMBCA permits the removal of a director without cause.
c. The articles of incorporation cannot provide for the removal of directors.
d. Under common law and statutory law, a director can never be removed without cause.

Sarah has a checking account at First Bank. Orrin steals one of her blank checks, writes a check for $250, and then forges Sarah’s signature. He then presents the check to First Bank for payment. First Bank pays the forged instrument. Which of the following statements is correct?
a. First Bank will have to recredit the $250 to Sarah’s account, but they can collect from Orrin if they can find him and he has the money.
b. First Bank will have to recredit the $250 to Sarah’s account, but only if they can collect the $250 from Orrin..
c. Sarah is primarily liable on the check even if she did not sign it and was not negligent in allowing Orrin to take
theblankcheck.
d. None of these.

A federal agency that wishes to adopt administrative rules must do so in compliance with the:
a. Administrative Procedures Act.
​b. U.S. Constitution.
c. agency’s enabling statute.
d. Rules must be adopted in compliance with all of the above.

Historically, privity of contract was not a requirement for a cause of action based on an accountant’s liability for negligence.
a. True
b. False

Lynne took her earrings off at Marcia’s beauty parlor and put them on the counter. She left the shop without remembering the earrings. Betty finds them and wants to keep them. Can she?
a. Yes, since she is a finder
b. Yes, she now is the true owner
c. No, since the earrings were personal property
d. No, Marcia would have first claim if the true owner is not discovered

Which of the following is not true regarding the warranty of habitability?
a. It is an implied warranty.
b. A majority of states hold that a builder-seller impliedly warrants a newly constructed house to be free of latent defects.
c. In the majority of states, the buyer must inspect the property thoroughly before completing the sale, as any
defect discovered only after the transaction is complete would not be the seller’s responsibility.
d. Many jurisdictions now require all sellers to disclose hidden defects that materially affect the property’s value
and that would remain undetected following a reasonable examination.

Which of the following promises in consideration of marriage would be outside the statute of frauds?
a. In consideration of Joan’s promising to marry him, a man promises to pay her an allowance and to give her all of his property upon his death.
b. John and Mary mutually agree that their marriage shall not affect the existing property rights of the other. c. John and Joan mutually promise to marry each other in a formal ceremony on June
d. Joan promises to release a money judgment against Steven in consideration of his marrying her.

Joe intentionally pushed Bill into a fence negligently erected by Sam around Sam’s swimming pool. The fence caved in and Bill nearly drowned. Under the Second Restatement, who is liable?
a. Sam, because of his negligent conduct.
b. Sam, because Joe’s conduct would be foreseeable.
​c. Joe, because of his intentional intervening conduct.
d. Sam and Joe, because they both contributed to the harm.

The effective date of a registration statement is the thirtieth day after filing, after which investors can access it using
EDMOND.
​a. True
b. False

The doctrine declaring that the mortgagee’s interest in the property is limited to the amount of the outstanding obligation is known as:
a. adverse possession.
​b. the title theory.
c. the lien theory.
d. equity of redemption.