Venture Capital, LP, is a limited partnership. Its limited partners include more than 150
sophisticated investors and investment professionals. A Venture limited partner loses his
or her limited liability if he or she
a. acts as the firm’s manager.
b. does not participate in the firm’s management.
c. invests in Unified Fund, one of Venture’s competitors.
d. votes on the firm’s sale or dissolution.
Bud approves on behalf of Codybut without authorizationa contract with Dik to build a
new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This
attempt will be
a. partly successful.
b. partly unsuccessful.
c. totally successful.
d. totally unsuccessful.
Rural Utility, Inc., enters into a contract with Shovel Excavation Service to dig up,
replace, and rebury Rural’s cables in a certain location. Rural advances Shovel 10
percent of its cost. If the parties rescind the contract, Shovel’s refund of the payment
would be
a. a penalty.
b. liquidated damages.
c. restitution.
d. specific performance.
The U.S. Patent and Trademark Office (USPTO) wants to review certain records of
Verity Corporation. The USPTO can legitimately gain access to the records through
a. agency coercion.
b. infiltrating Verity’s computers without the firm’s knowledge.
c. public comment.
d. Verity’s consent.
Dakota believes that Credit Services Corporation (CSC) has discriminated against her
on the basis of gender. She files a suit against CSC under the Civil Rights Act of 1964.
To establish a prima facie case of employment discrimination, Dakota must show that
a. she is a member of a protected class.
b. CSC has no legal defenses against the claim.
c. discriminatory intent motivated CSC’s act.
d. no other firm in CSC’s industry has committed a discriminatory act.
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Company’s land. Mineral’s right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Elinor sells Cathy a horse for $2,000. When Elinor goes to the bank to deposit Cathy’s
check, the check bounces. Elinor is furious and files suit against Cathy. Elinor probably
filed her suit in
a. a small claims court.
b. a domestic relations court.
c. a municipal court.
d. a probate court.
Chloe files a suit against Digital Associates, Inc. (DAI), to enforce a contract. The only
written evidence of the contract is a memo on DAI’s letterhead as signed by a DAI
officer in its files. The contract can be enforced if the memo includes
a. a correct title, such as “Chloe-DAI Contract.”
b. all essential terms.
c. a statement of the consideration.
d. the parties’ addresses.
Soleful Shoes, Inc. owns property in Somalia. The Somalian government seizes the
property. In order for the seizure to be considered an expropriation and not a
confiscation, the Somalian government must
a. pay just compensation to Soleful Shoes.
b. give Soleful Shoes at least thirty days notice of the seizure.
c. give Soleful Shoes at least ninety days notice of the seizure.
d. notify the U.S. government before the seizure.
General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1
million from Helpful Finance Corporation for a security interest in the equipment. The
next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the
equipment. GLC defaults on the loans.
Suppose that Helpful perfects its security interest when GLC takes possession of the
equipment. In that circumstance, the party with priority to the collateral on GLC’s
default would be
a. GLC.
b. Helpful and Interstate proportionately.
c. Helpful only.
d. Interstate only.
Isabel obtains a fire insurance policy on her home from Justice Insurance Company.
The home is lost in a fire, but the parties dispute the amount of Justice’s liability under
an ambiguous clause in the policy. A court would most likely
a. interpret the clause against Isabel.
b. interpret the clause against Justice.
c. rewrite the clause and apply it as rewritten.
d. strike the clause from the policy.
Homer’s Remodeling, LLC, is a limited liability company. Among the members, a
dispute arises that their operating agreement does not cover. No statute applies. The
dispute is governed by the principles of
a. corporate law.
b. partnership law.
c. sole proprietorship law.
d. joint venture law.
Grace applies for a homeowners’ insurance policy on her house with Heroic Insurance
Company through Ian, a broker. In this transaction, Ian is
a. an agent for both parties.
b. Grace’s agent, and not Heroic’s agent.
c. Heroic’s agent, and not Grace’s agent.
d. not an agent.
Lew, a member of a protected class, applies for a job with Mit-E Construction
Company, but fails Mit-E’s employment test and is not hired. Lew believes that the test
has an unintentionally discriminatory effect. If so, this is
a. reverse discrimination.
b. disparate-impact discrimination.
c. disparate-treatment discrimination.
d. not discrimination.
Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed
by the Uniform Partnership Act
a. in the absence of an express agreement.
b. in the absence of an implied agreement.
c. only in the presence of an express agreement.
d. under all circumstances.
The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine
justices, five believe the judgment should be in Livewire’s favor. Justice Bellamy, one
of the five, writes a separate opinion. The four justices who believe the judgment should
be in Power’s favor join in a third separate opinion.
Refer to Fact Pattern 1-1. The opinion joined by the four justices who favor Power is
known as
a. a concurring opinion.
b. a dissenting opinion.
c. a majority opinion.
d. a per curiam opinion.
Nico is a passenger in a car driven by Owen, whose reckless driving causes an accident,
injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an
ambulance. The ambulance is hit by a car driven by Quin, and Nico is injured. Nico
files a suit against Owen, alleging negligence. The element most likely to be a question
for the court to decide is
a. causation in fact.
b. proximate cause.
c. the duty of care.
d. the injury requirement.
Mary is angry with Julia so she waits outside Julia’s house and hits Julia with a baseball
bat as Julia leaves the house. When Julia sues Mary for battery, Mary will be considered
a
a. victim.
b. tortfeasor.
c. plaintiff.
d. unreasonable person.
Gene sells a trail bike to Hollis without disclosing that the odometer, which reads
10,000 miles, was disconnected 90,000 miles ago. Gene is most likely liable for
a. undue influence.
b. fraud.
c. mistake.
d. nothing.
Jamie is redoing his kitchen and decides he needs a floor sander to complete the job.
Jamie tells Rachel, his neighbor, that he needs a floor sander. Rachel tells Jamie to call
Home Repair Rentals, Inc. Home Repair Rentals leases Jamie a floor sander. In this
transaction the lessor is
a. Jamie.
b. Rachel.
c. Home Repair Rentals.
d. both Jamie and Rachel.
Starlight Caf brings a suit, seeking a remedy at law. A remedy at law is
a. the payment of money or property as compensation for damages.
b. a decree of specific performance.
c. a judicial proceeding for the resolution of a dispute.
d. an injunction.
Posing as Platinum Bank, Oswald e-mails Nadia, asking her to update her personal
banking information through a link in the e-mail. She clicks on the link and types in the
data, which Oswald promptly sells to Moe. This is
a. hacking.
b. identity theft.
c. cyberterrorism.
d. bribery.
An antitrust action is brought against Tri-State Transport Company, alleging the offense
of attempted monopolization. To be guilty of this offense, Tri-State’s attempt must have
a. a dangerous probability of success.
b. a deadly guaranty of success.
c. a distant possibility of success.
d. a distinct improbability of success.
Sherman dies without a will, survived by his granddaughter Roxy and Roxy’s brother
Pio. Roxy and Pio are Sherman’s
a. collateral heirs.
b. settlors.
c. trustees.
d. lineal descendants.
Julia owns and operates Collectable Dolls without creating a separate business
organization. She receives all the profits from the doll sales. Collectable Dolls is most
likely a
a. a corporation.
b. a limited liability company.
c. a partnership.
d. a sole proprietorship.
To acquire the ownership of a mountain cabin by adverse possession, Cody must
occupy the cabin exclusively, continuously, and peaceably for a specified period of time
a. in an, open, hostile, and adverse manner.
b. until the owner files a suit.
c. without the owner’s knowledge.
d. with the state’s permission.
Joe files a voluntary petition for Chapter 7 bankruptcy. His petition does not need to
include
a. a list of Joe’s secured creditors.
b. a list of Joe’s unsecured creditors.
c. a list of the occupations of all Joe’s creditors.
d. the addresses of all Joe’s creditors.
Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering
agreement. Under a partnering agreement, parties agree
a. in advance to terms that apply to their future e-transactions.
b. to become partners.
c. to conduct transactions solely in electronic form.
d. to resolve all disputes without involving a third party.
To buy a stuffed cow, Ken executes a check “pay to Laura or bearer” and gives it to
Laura, who does not own a stuffed cow. This check is
a. negotiable.
b. nonnegotiable, because it does not indicate a specific payee.
c. nonnegotiable, because it may be a joke.
d. nonnegotiable, because Laura does not own a stuffed cow.
Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to ensure that
Flo-Thru’s activities are legal and ethical. The best course for Eden and Flo-Thru is to
act in
a. good faith.
b. ignorance of the law.
c. regard for the firm’s shareholders only.
d. their own self interest.
Title VII of the Civil Rights Act of 1964 applies to which of the following?
a. An employer with five employees
b. An employer with ten employees
c. A labor union with twenty-five members
d. A labor union with twelve members
Nature’s Products, Inc., sends its standard order form to Interbusiness Distribution
Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own
standard purchase order form. Additional terms in the purchase order automatically
become part of the contract unless
a. the terms materially alter the original contract.
b. the original offer expressly required acceptance of its terms.
c. the offeror objects to the new terms within a reasonable time.
d. any of the choices.
Kay and Leo enter into a contract that falls within the provisions of the UETA. Under
the UETA, “an electronic sound, symbol, or process attached to or logically associated
with a record and executed or adopted by a person with the intent to sign the record” is
a. an e-document.
b. an e-signature.
c. an e-transaction.
d. a record.
On default, unless the security agreement states otherwise, the secured party has the
right to take possession of the collateral.
Patents are not considered personal property.
When a limited liability company is dissolved, any member who did not wrongfully
dissociate may participate in the winding up process.
Corporations’ chief executive officers are directly accountable for the accuracy of
financial statements filed with the Securities and Exchange Commission.
An employer may not hire substitute workers to replace strikers.
Words or terms in contracts that are subject to more than one reasonable interpretation
can lead to bilateral mistakes.
Under federal law, an electronic signature can be as valid as a signature on paper.
Generally, a state court’s power is limited to the territorial boundaries of the state in
which it is located and the immediately adjacent states.
Courts in many jurisdictions will consider the negligent actions of both the plaintiff and
the defendant when apportioning liability in a product liability action.
A disclosed principal is a principal whose identity is not known by the third party at the
time the contract is made by the agent.
Merchants must ship orders within the time promised in their ads.
A substitute check is a paper reproduction of the front and back of an original check.
An attachment is a court-ordered seizure and taking into custody of property before a
judgment is obtained on a past-due debt.
The United States Supreme Court has original jurisdiction in some situations.
A group of individuals getting together to finance a particular project may form a
syndicate.