Which of the following are remedies for violation of the American’s with Disabilities
Act (ADA)?
a. Injunctive relief
b. Reinstatement
c. Back pay
d. Compensatory and punitive damages
e. All of the above
Social Security benefits are funded by:
a. legally required assessments on employers.
b. taxes paid by both employers and employees, or by self-employed persons.
c. the federal tax on corporations.
d. a combination of federal and state taxes.
Authority that is not found in the express or explicit words of the principal, but that is
inferred from the words is known as:
a. apparent authority.
b. indirect authority.
c. delegated authority.
d. None of the above.
Elmer has been a faithful worker at the Middle America Manufacturing Company for
over 30 years. One day when he comes to work, he gets called into the supervisor’s
office and is told that the company has decided to lay off all of its current employees
and move the plant to India.
Phillip purchased a new forklift for his business from Brown’s Equipment Co. He paid a
$14,500 down payment and signed a promissory note for $17,500. Brown’s sold the
note to Corporate Bank and received $16,800. After using the forklift for two weeks, it
broke down and could not be repaired. Phillip refuses to make any more payments to
Corporate Bank. In this case:
a. Phillip can assert the failure of the forklift as a defense to making payments to
Corporate Bank.
b. Corporate Bank is a holder in due course if it took the note in good faith and had no
notice of defenses against the note.
c. Both answers (a) and (b) are correct.
d. Neither answer (a) nor answer (b) is correct.
Which of the following is not true about the Home Mortgage Disclosure Act?
a. It was enacted to emphasize to financial institutions the importance of their
reinvesting funds in the communities they serve.
b. It was enacted to put redlining into effect.
c. It outlawed geographic discrimination.
d. It requires public disclosure of the financial institution’s geographic pattern of
mortgage lending.
Which of the following will destroy negotiability?
a. Leaving the name of the payee off a check
b. Making the check payable in German marks
c. Signing a check with an “X”
d. All of the above.
Jesse makes an offer to Ike, and Ike accepts; then the state legislature passes a law that
makes performance of the contract illegal. What is the effect of the new statute on the
contract?
a. The contract is severed; any portions that are legal must still be performed and any
portions that have been made illegal must not be performed.
b. The statute has no effect on the contract.
c. The statute acts as a condition on the contract.
d. The statute discharges the obligations of both parties under the contract.
R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott
would receive $20,000 if he stole trade secrets from the leading competitor of R&R.
Scott performed his end of the agreement by delivering the trade secrets. If R&R now
refuses to pay Scott for his services, Scott:
a. may recover based upon the express contract of the parties.
b. may recover based upon a quasi-contractual theory in order to prevent the unjust
enrichment of R&R.
c. will be unable to recover, because this is an illegal contract.
d. will be able to recover based upon promissory estoppel, because he has detrimentally
relied upon the promises made by R&R.
There are rigorously enforced restrictions regarding both number and qualification of
investors who purchase securities under Regulation A.
Upon the surety’s payment of the principal debtor’s entire obligation, the surety obtains
all of the rights the creditor has against or through the principal debtor. The term for the
surety’s ‘stepping into the shoes” of the creditor is known as:
a. contribution.
b. subrogation.
c. reimbursement.
d. exoneration.
One method of taking a publicly held corporation private, by forcing minority
shareholders to accept cash or property for their shares, is a(n):
a. appraisal remedy.
b. cash-out combination.
c. management buyout.
d. tender offer.
Which of the following is not true about a corporation’s ratification of an officer’s act?
a. It applies to an authorized act of an officer.
b. It relates back to the original transaction.
c. It may be either express or implied from the corporation’s acceptance of contractual
benefits.
d. The corporation must have full knowledge of the facts in order to ratify the act.
Which of the following debts are dischargeable in a Chapter 7 bankruptcy proceeding?
a. Alimony and child support payments amounting to $1,000 per month
b. Medical expenses of $15,000
c. Student loans of $20,000 that first became due last year
d. All of the above are dischargeable
e. None of the above are dischargeable.
Which of the following would most likely be a defect under 402A of the Restatement of
Torts?
a. A chair produced without inserting the appropriate screws
b. A product with a defective design that is ‘state of the art” and the manufacturer, even
if it knew of the design hazard, could not have designed a safer product given existing
technology
c. Vodka that is 100-proof and contains a warning that it can make people drunk and
cause liver damage after years of heavy use
d. All of the above are defects under 402A.
J & J Co. offers a ‘subscription” for baby toys to be delivered every two months from
the birth of a child. Payment must be made within two weeks of delivery. The Markham
family accepted the J & J plan when their son, Timmy, was born. When Timmy was
four months old, one J & J toy arrived, smashed to pieces. Markham:
a. can treat the whole contract as breached and refuse to pay for past installments as
well as future installments.
b. can reject the installment and cancel the contract immediately.
c. can reject the installment and refuse to pay if J & J cannot cure it.
d. cannot reject the installment since it is part of a series.
The Constitution protects against taking of property:
a. by a corporation.
b. without notice.
c. for public use.
d. without due process.
Ray threw a bomb into the office of his insurance agent, intending to kill the agent
because the company had disallowed his claim. The agent wasn’t in the building, but the
bomb seriously injured his secretary, who was working in the office. Ray:
a. cannot be liable to the secretary for any torts because he did not intend to hurt her.
b. can be sued by the secretary with an intentional tort cause of action because Ray’s
intent to harm the agent is transferred to the secretary.
c. has committed a crime, but he is not liable for any torts.
d. has committed the tort of intrusion.
David enters into a contract to give Edward the right of first refusal to purchase a tract
of land owned by David. David subsequently offers the land to Fred without first
offering it to Edward. An appropriate remedy for Edward to seek would be:
a. injunction.
b. liquidated damages.
c. reformation.
d. punitive damages.
What is the reasonable person standard? How is it applied to each of the following?
a. Children
b. Persons with physical disabilities
c. Persons who are mentally retarded
d. Professional people with advanced degrees and training, such as doctors, lawyers,
and accountants
e. Persons acting in emergency situations
f. Persons who violate statutory duties
At common law, ____ was defined as a breaking and entering of a dwelling house at
night with the intent to commit a felony.
a. burglary
b. bribery
c. robbery
d. theft
A(n) ____ is a measure designed to protect the public from unqualified practitioners.
a. exculpatory clause
b. revenue license
c. regulatory license
d. usury statute
Answer the following:
a. State and local governments require licenses for certain business and professional
activities. Explain the difference between a regulatory licensing statute and a licensing
statute enacted to raise revenue.
b. Explain the significance in contract law between a regulatory license and a revenue
raising license.
c. Give an example of each type of licensing statute.
David is a surety for Stacy on a debt that is owed to Fred. Stacy now refuses to pay the
debt. David:
a. can obtain a decree ordering Stacy to pay Fred if the debt is due and Stacy fails to
pay.
b. can sue Stacy for money damages only.
c. has the right of exoneration.
d. Both (a) and (c) are correct.
A statutorily secured monopoly right that is issued to inventors or discoverers of useful
new devices or processes is known as a:
a. copyright.
b. patent.
c. service mark registration.
d. trade name registration.
Indispensable paper includes:
a. documents of title.
b. accounts receivable for a business.
c. patents.
d. a contract evidencing literary rights.
e. All of the above.
The Sarbanes-Oxley Act was enacted in response to:
a. accountants’ requests for definitive guidelines for their profession.
b. business scandals involving companies such as Enron, WorldCom, and the Arthur
Andersen accounting firm.
c. the need to lighten the oversight and enforcement responsibilities of the SEC.
d. the Ultramares Corporation v. Touche case.
Answer the following:
OmegaByte Corp. has 1,000 shares of stock outstanding that are permitted to vote for
directors. If OmegaByte Corp. permits cumulative voting, a minority shareholder would
need to vote how many shares to elect one of three directors?
a. 251
b. 501
c. 751
d. 334
If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they
would own one-third of the remaining mixture by:
a. accession.
b. adverse possession.
c. prescription.
d. confusion.
Paul is a truck driver who owns his own truck and delivers loads to various companies
for nine months out of the year. For the hard winter months Paul goes to Key West to
“put his feet in the sand.” One evening while delivering a load for Emblem Helicopter
Parts Co., Paul got into a “little scuffle” with a rowdy trucker who was giving Nell, a
waitress at the DewDrop Inn Cafe, a hard time. Paul knocked out five of “Rowdy’s”
teeth. Rowdy is suing Paul and Emblem for his injuries. Discuss whether Rowdy will
win against Emblem on the issue of: (a) respondeat superior and (b) unauthorized acts
of agents.
Abe is involved in an automobile accident and is injured. While he is unconscious, the
police call an ambulance which takes him to a hospital. Abe is treated at the hospital
and released a day later. The hospital sends him a bill for $2,400, which Abe refuses to
pay, claiming it is too high and he never consented to the treatment because he was
unconscious. Abe:
a. has entered into a unilateral contract with the hospital and therefore will have to pay
the bill.
b. has a quasi-contractual agreement with the hospital.
c. has entered into an implied in fact contract with the hospital.
d. and the hospital have entered into a bilateral contract, the terms of which require that
he pay the bill.
Trudy would breach the duty to inform if she failed to tell her principal:
a. a debtor of her principal has become insolvent.
b. property her principal authorized her to sell at $50,000 could be sold for $53,000.
c. a customer of her principal has become insolvent.
d. All of the above.
A tenancy in common may be terminated by:
a. one of the tenants selling or transferring his interest to the co-tenant.
b. the co-tenants partitioning the property among themselves.
c. Both (a) and (b).
d. Neither (a) nor (b).
The FTC Act contains very specific definitions of the terms “unfair” and “deceptive.”
Rightful rejection must be made within a reasonable time after the goods have been
tendered or delivered.
Nuncupative wills are generally enforceable.
A statutory lien arises solely by force of statute and includes a security interest or
judicial lien.
Many courts will allow recovery for the infliction of emotional distress even in the
absence of physical injury.
A basic element of fraud is a false representation or a misrepresentation.
The judicial branch for the United Nations is called the International Court of Justice.
One common type of restrictive covenant restricts the use of property to residential
purposes.
Comparative negligence has replaced the contributory negligence doctrine in most
states.
An attorney retained to handle a particular transaction is an independent contractor and
also an agent regarding that transaction.
A license is generally irrevocable by the property owner.
First Bank loans Lila $1,500 so that she may purchase a computer for her office
secretary. Lila signs a financing statement, which First Bank duly files within twenty
days. After Lila purchases the computer, she takes out a loan at Valley Bank, gives the
computer as collateral, and signs a financing statement, which Valley Bank then duly
files. Her secretary never uses the computer, so Lila puts an ad in the paper and sells the
computer to Angie. If Lila defaults on the loans, whose interest in the computer has
priority? Explain, using correct terminology.
A time draft is one payable upon demand (at the time it is presented to the drawee).
If Hana pays the purchase price for property and takes title in the name of Thalia, a
constructive trust is formed with Thalia being treated as the trustee.
An agent has the power to contractually bind her principal whenever she has actual or
apparent authority and acts within her authority.
Define “mistake,” “mutual mistake,” and “unilateral mistake.” Explain how the law
treats mutual and unilateral mistakes.
The officers determine the capital structure and financial policy of the corporation.