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In order to satisfy the writing requirement of the statute of frauds, both parties must
provide the entire agreement in writing.
The term for outsiders who attempt to gain control of a corporation is called raiders.
A firm's offer for the sale of goods requires consideration to be given in exchange for
the offeror's promise to keep the offer open.
Any land owner can bring an action for a public nuisance.
A party who has the right to rescind a contract may do so at any time.
Article 2 of the UCC governs secured credit transactions.
Where the creditor has possession of the collateral, the security agreement may be oral.
Instruments cannot be negotiable if they are payable in a foreign currency.
For a state trial court to have the power to decide a civil case, it must have in personam
jurisdiction or in rem jurisdiction.
An accountant who substantially performs her duties to her client triggers the client's
duty to pay the contract price, less any damages resulting from defects in her
performance.
A certificate of limited partnership must state the capital contributions of the limited
partners.
An agency coupled with an interest cannot be terminated by the principal's revocation
of the agency.
An agreement to divorce one's spouse is considered to be illegal.
Unless state law says otherwise, a bankrupt party may choose either the state's
exemptions or the federal exemptions when deciding which property to exempt from
bankruptcy.
Patent law is always an area of exclusive federal jurisdiction.
A promissory note is a credit instrument.
An oral contract within the UCC statute of frauds can be enforced without a writing
only if it involves the sale of specially manufactured goods.
Anne induces Ben's consent to contract under duress. Anne later assigns her rights
under the contract to Carl. Ben may assert the doctrine of duress against Anne as a
ground for avoiding the contract.
Customer lists are not patentable but may be subject to trade secret protection.
Officers may conduct a warrantless search of an individual at the time of an arrest.
The basic recovery for copyright infringement is only the owner's actual damages.
Some courts allow promissory estoppel to bind parties to oral contracts that otherwise
would be unenforceable under the statute of frauds.
A surety who pays a debtor's debt to the creditor gets all the rights the creditor had
against the debtor. This is called surety's right of subrogation.
A promissory estoppel cannot be applied in the case of the absence of a binding
consideration.
Bob parked his new Porsche with the restaurant valet. The valet gave Bob a claim
receipt. A bailment has been created.
The intention to accept an offer must be a present intent to contract.
Jim Stanley writes a check on his checking account with a bank. The bank is the drawee
here.
Order paper that is indorsed in blank becomes bearer paper.
If a landlord has a lien towards the tenant, the landlord can remove or hold the property
of the tenant.
You can form a partnership with one individual.
Cutco Lawn Products Manufacturing Company sells 100 riding lawn mowers to the
Smith Hardware Company, a retailer in the same industry. Smith pays for the mowers
with a $50,000 loan from the Bass Bank. The Bank takes a security interest in the
mowers to secure payment of the loan, and perfects it by filing. Later, Smith sells one of
the mowers to Carl, a consumer, who buys in good faith and in the ordinary course of
Smith's business. However, Carl knows that the Bank has a security interest in the
mowers. Smith defaults on its loan payments, and the Bank moves to repossess all the
mowers. Can it repossess the mower sold to Carl?
A. Since the Bank attached its security interest, it may repossess the mower from Carl.
B. Since the mower is in Carl's possession now, the bank has no right over this third
party.
C. Since Carl knew about Bass's security interest, the bank may repossess his mower.
D. Since Carl bought the mower in good faith, the bank may not repossess his mower.
Under the Electronic Funds Transfer Act how many days do operators of EFT systems
have to investigate errors or provisionally recredit a consumer's account?
A. 10 working days
B. 60 days
C. 14 working days
D. 90 days
A plaintiff will succeed against her employer in a disparate treatment case under Title
VII if she can prove that:
A. her employer does not pay her well.
B. her workload is very high.
C. her employer rarely approves her requests for leave of absence.
D. her employer discriminates against her on the basis of race.
A partner's ownership interest is called _____.
A. a partnership interest
B. a shareholder interest
C. a partnership liability
D. a charging order
In a lawsuit for intentional interference with contractual relations, the existing contract
includes:
A. void bargains
B. illegal contracts
C. contracts to marry
D. unenforceable contracts
_____ prohibited federal court enforcement of yellow-dog contracts.
A. The National Labor Relations Act
B. The Railway Labor Act
C. The Norris-LaGuardia Act
D. The Fair Labor Standards Act
Section 4(2) of the 1933 Act covers the _____ offering exemption from the registration
provisions.
A. intrastate
B. interstate
C. private
D. small
Jack had taken his girlfriend Jenny on a long drive. While driving on the highway, he
suddenly had a severe headache and lost control of the car. They were hit by a passing
car. The doctor had earlier warned Jack that he has a brain tumor, due to which he
would experience occasional pains. Jenny sued Jack for negligence. Will she succeed?
A. Yes, because Jack could reasonably foresee severe pain which might lead to
accidents.
B. No, because Jack did not intend to cause an accident.
C. Yes, because Jack caused the accident.
D. No, because she should have sued the driver of the passing car which hit them.
Typically a principal is not held liable for the actions of a nonemployee agent, but an
exception to this general rule is:
A. If the principal profits more than $100 by the nonemployee agent's actions
B. The principal's hiring of a dangerously incompetent nonemployee agent
C. The principal filing a Notice of Danger
D. The principal notifying an incorporator of the independence of a nonemployee agent
James has entered into a contract to sell his house to Mikhael. James knows that the
house has a bad termite infestation that significantly reduces the value of the house.
However, the topic of termites never came up and James did not volunteer any
information about the termites. Mikhael is not aware of the termite problem. Under the
law of most states, has legal misrepresentation occurred here?
A. No, because James made no statement that was false.
B. No, because a seller does not have a duty to reveal all faults.
C. Yes, because a seller must always inform a buyer about defects that are not obvious.
D. Yes, because James is concealing the termite infestation from Mikhael.
In general, the material alteration of a completed negotiable instrument:
A. is a complete defense against a holder in due course.
B. is no defense whatsoever against a holder in due course.
C. means that a holder in due course can enforce the instrument against the maker, but
only according to its original tenor.
D. means that a holder in due course can enforce the instrument as modified.
Subsequent agreements are treated in what way under the parol evidence rule?
A. Subsequent agreements are admissible under the parol evidence rule
B. Subsequent agreements are not admissible unless they were filed with a
governmental agency
C. Subsequent agreements are not admissible since they attempt to modify an integrated
contract
D. Subsequent agreements are not admissible unless that involve two international
parties
Earl leased an apartment from Kent. Under the terms of the lease, Earl would remain a
tenant for eight months and the tenancy would expire on December 8th. This is an
example of:
A. a tenancy for years.
B. a month-to-month tenancy.
C. a tenancy at will.
D. a tenancy at sufferance.
A person creates a handwritten instrument in pencil on a piece of wrapping paper. The
instrument is:
A. negotiable even though it is handwritten.
B. nonnegotiable because it is handwritten.
C. nonnegotiable since it is written on a piece of wrapping paper.
D. void.
As per the Model Nonprofit Corporation Act (MNCA), a nonprofit corporation need not
have members for its existence.
What is the only function of an incorporator of a business?
A. To bring a corporation into existence
B. To serve as the corporation's first CEO
C. To issue public offerings of stock
D. To act as attorney in fact on a permanent basis for the business
Jerry Hall makes out a note for $100 in such a way that someone could alter it to read
$100,000. Someone alters the note and negotiates it to Pete Mason, who can qualify as
a holder in due course. Which of the following statements is true for this situation?
A. Jerry shall share the loss with the bank where she holds an account.
B. Jerry does not have to pay Pete who currently possesses the note.
C. Pete can collect $10,000 from the person who "raised" the note.
D. Pete can collect $10,000 from Jerry.
An individual or organization seeking judicial review of an agency action must first
demonstrate that:
A. the agency action being challenged is reviewable.
B. the required consent orders have been signed.
C. other administrative remedies have not been used.
D. the individual or organization has no standing to sue.
Magnum Corp. rented a building from Wheiler to set up an office for a 5 year lease
period. After the office was set up, it was found that the paint was peeling off in many
places, the washrooms were broken, and the floors were completely damaged. Magnum
sued Wheiler for damages. Magnum will:
A. win the case because Wheiler is the owner of the damaged premises.
B. win the case because property leased for commercial purposes is the owner's
responsibility.
C. lose the case because the implied warranty of habitability is not applicable.
D. lose the case because Wheiler has no responsibility to maintain his premises.
The toxic waste dump cleanups required by CERCLA:
A. are funded entirely by a tax on chemicals and feedstocks.
B. are funded entirely by the state in question.
C. are funded entirely by the responsible party or parties.
D. are funded entirely by the "Superfund."
Gillie, Taft, and Dall are partners in an architectural firm. The partnership agreement is
silent about the payment of salaries and the division of profits and losses. Gillie works
full-time in the firm, and Taft and Dall each work half-time. Taft invested $120,000 in
the firm, and Gillie and Dall invested $60,000 each. Dall is responsible for bringing in
50 percent of the business, and Gillie and Taft 25 percent each. How should profits of
$120,000 for the year be divided?
A. Gillie $60,000, Taft $30,000, Dall $30,000
B. Gillie $40,000, Taft, $40,000, Dall $40,000
C. Gillie $30,000, Taft $60,000, Dall $30,000
D. Gillie $30,000, Taft $30,000, Dall $60,000
In a state that has adopted the Ultramares rule and uses the primary benefit test, who
amongst the following may hold an accountant liable for common law negligence?
A. Only the client.
B. Only the client and a third party that the accountant knew would rely on the
accountant's work for a particular purpose.
C. Only the client. A third party that the accountant knew would rely on the accountant's
work for a particular purpose, and others who are in the same limited class as that third
party.
D. Any third party that is a foreseeable user of the accountant's work may hold him/her
liable if that third party suffers a loss as a direct result of the accountant's negligence.
The RUPA makes a dissociated partner liable as a partner to a party that entered into a
transaction with the continuing partnership, unless:
A. the other party believed the dissociated partner was still a partner.
B. the transaction was entered into more than two years after the partner has
dissociated.
C. the transaction was entered into 90 days before the filing of a Statement of
Dissociation with the secretary of state.
D. the other party was not made aware of the partner's dissociation.
Rick tells Dan that Sue will inherit a mansion if she pays him back an old debt. Since
Sue is unable to pay the debt, Dan offers to pay it provided that he gets the mansion
from Rick. The agreement between Dan and Rick need not be in writing under the:
A. collateral contract rule.
B. parol evidence rule.
C. leading object rule.
D. part performance rule.
In which of the following situations is an employer least likely to be able to escape Title
VII liability on the basis of a BFOQ defense?
A. Where the alleged BFOQ promotes an accountancy firm's newly adopted goal of
fetal protection.
B. Where the alleged BFOQ is needed in an all-male prison which houses sex
offenders.
C. Where a man is denied work as an undergarment fitter for female customers at a
department store.
D. Where a French restaurant denies a German a job as a "French Chef."
A bankruptcy petition under Chapter 7:
A. can only be filed by the debtor.
B. can only be filed by the debtor's creditors.
C. can only be filed by the trustee.
D. can be filed either by the debtor or his creditors.
What does the term ‘grumbling acceptance' mean?
A. Accepting the offer by maintaining one's silence
B. Making material changes to a contract when accepting it
C. Inquiring about the terms of the offer without rejecting it
D. Accepting an offer while complaining about the terms
Under the product liability theory of strict liability as expressed in the Restatement
(Second) of Torts, what is an essential fact that must be present if strict liability may be
used in a lawsuit as the basis for recovery?
A. The product must be unreasonably dangerous.
B. The product must be un-merchantable.
C. The product must be unfit for the purpose intended by the buyer.
D. The product must be unfit for any purpose.
Terrance and Barbara created a limited partnership, but inadvertently misstated its name
in the certificate of limited partnership. How will their liability be affected by this?
A. The partners will have unlimited liability.
B. Only general partners will have limited liability.
C. Only general partners will have unlimited liability.
D. The partner contributing more will be held for liability.
_____ is a teleological ethical theory because it focuses on results by maximizing total
social welfare.
A. Rights theory
B. Kantian theory
C. Deontological theory
D. Profit maximization theory
Susan was hired by Teddy & Co. as a sales woman. However, the management on
seeing her intelligence and capabilities allowed her to use the office library and research
facility to create an inventive product. Susan now wants to patent the product in her
own name. This is not permissible under the:
A. doctrine of equivalents.
B. respondeat superior doctrine.
C. shop right doctrine.
D. doctrine of assignment.
The Federal Water Pollution Control Act (FWPCA) is also known as the:
A. Ocean Dumping Ban Act.
B. River and Harbor Act.
C. Safe Drinking Water Act.
D. Clean Water Act.
Commissioners or board members of which of the following can be removed only for
cause?
A. The Occupational Safety and Health Administration
B. The Food and Drug Administration
C. The Internal Revenue Service
D. The Interstate Commerce Commission
Gridco, Inc. owns the building in which its offices are located. On April 1, Gridco
insured the building with Olden Days Insurance Co., which issued a $200,000 face
amount policy. The Olden Days policy contained a pro rata clause. Keeping that policy
in force, Gridco procured an additional policy on the building on June 15. This policy,
had a $600,000 face amount and contained a pro rata clause, was issued by Big City
Insurance Corp. On August 10, while both policies were in force, lightning (a covered
peril under each policy) struck the Gridco building. This sparked a fire that resulted in
$72,000 of damage to the warehouse. Gridco has filed claims and proofs of loss with
Olden Days and Big City. Which of the following correctly sets forth the amounts the
respective insurers must pay Gridco?
A. Olden Days: $72,000; Big City: 0.
B. Olden Days: $18,000; Big City: $54,000.
C. Olden Days: 0; Big City: $72,000.
D. Olden Days: $24,000; Big City: $48,000.
Which of the following is true about an S corporation?
A. It is taxed at both the corporate and shareholder levels.
B. It may only have 500 or less shareholders.
C. An S corporation election requires the consent of a majority of its shareholders.
D. Shareholders of an S corporation may be only individuals or trusts.
On October 31, a Congressional candidate orders a quantity of campaign literature from
a local printer. The stated time of performance is November 2. November 8 is Election
Day. The printer is not delivered until November 9. Thus, the candidate refuses to pay
the printer one cent. Is this position justified? Why or why not?
What are the conditions necessary for a person to be able to accept a negotiable
instrument as a substitute for money?
Alice writes a check "Pay to the order of Caleb." The check is drawn on the Berkley's
Bank. Who are the drawer, the drawee, and the payee on this instrument? Why is this
check called order paper?
Nuisance involves the invasion of another's property.
The UCC states that a properly dispatched acceptance sent by a reasonable means of
communication within a reasonable time is effective on dispatch. What does the UCC
mean by "reasonable" here?
Isaac contracts to sell Boyd all of his requirements of coal. In the past, Boyd has
required between 1000 and 1500 tons of coal per year, but the contract contains no
estimate of Boyd's needs. In 1998, Boyd's needs increase dramatically, and it demands
10,000 tons of coal from Isaac. Is Isaac obligated to sell Boyd this amount?
Xavier, Yellie, and Zelda are partners of Koral Associates. The term of the partnership
is 5 years, but Zelda withdraws after 1 year because she no longer wished to continue.
Discuss the nature and consequences of Zelda's dissociation.
What do statutes and administrative regulations have in common?
What are the three basic requirements for a security interest to be attached to the goods
of a debtor?
Bunyan Corp. has patented a revolutionary chainsaw. In order to maximize the revenues
from its patent and recover its research and development expenses, Bunyan requires
other manufacturers that make the chainsaw under license from Bunyan to adhere to a
minimum price schedule. Bunyan also requires its retail dealers to adhere to a minimum
resale price schedule. The Justice Department has challenged Bunyan's marketing
practices as unlawful. Is the challenge valid? Explain your reasoning.
The Mandarin City contracts with the Zoid Construction Company to construct a new
sewer system for the city. Later, Zoid breaches the contract. George, a resident of the
city, sues Zoid for its breach of contract. Can George recover? Why or why not?
Shawnequa is a partner of Cost Hydrohut LLP, an accounting limited liability
partnership. One of Shawnequa's partners negligently audits a client, with the result that
a bank that relied on the client's audited financial statements suffers damages when the
client fails to repay the loan. The bank sues Cost Hydrohut, but its assets are
insufficient to pay the entire damages. Will the bank be able to collect the remaining
damages from Shawnequa's personal assets?
Ace Insurance Company issues a legal malpractice insurance policy to Bob, an attorney.
Bob decides to skip a court appearance to go relax at his beach house. His client, Gina,
brings a legal malpractice claim against Bob based on his failure to appear. Ace is
unsure whether its policy covers intentional acts such as Bob's decision. Is Ace
obligated to provide Bob with an attorney to represent him in Gina's malpractice claim
against him? Explain.
Since the exclusionary rule has often resulted in suppression of convincing evidence of
crime, it has generated controversy. How has the Supreme Court dealt with this?
The board of directors of Laylow Corporation issued 1,000 shares representing 10
percent of the corporation to Don in exchange for an unsecured promissory note to pay
Laylow $50,000 within the next 20 years. Don is the son of Charles, owner of 70
percent of the shares of the corporation. The total book value of the corporation at the
time Laylow issued the shares was $5,000,000. Alan and Bob, owners of 20 percent of
the total shares, discovered the transaction one month after it occurred. Alan and Bob
sued Don on behalf of Laylow Corporation seeking to invalidate the transaction. Should
the court invalidate it? Discuss.
Ashley says to Bob: "I promise to pay you $20 if you will shovel my sidewalk." Bob
begins to shovel, and soon he has completed 90% of the job. Then Ashley tells him:
"Thanks, but I revoke." Bob then finishes the job in about ten minutes. Can Bob recover
against Ashley in contract? Why or why not? In any event, what other theory might Bob
use?
